ABSTRACT

The boards of directors are vitally important for the corporations because they act as the centre for strategic decision making. The success and sustainability of companies depend on their ability to make accurate decisions. Therefore, the constitution of a suitable Board compatible with Company characteristics is a very important issue. However, it is necessary to know which factors need to be taken into account regarding the formation of boards. In this paper, it was tried to reveal the variables that would affect the number of Board members. The survey was conducted with data collected as of 31.12.2013, on 100 public listed companies which were part of the BIST 100 INDEX. The dependent variable was determined as the board size (number of members). 6 factors which are considered to affect to the board size including company age, presence of foreign shareholders, number of subsidiaries, presence of corporate governance rating, total asset size and net sales are taken into account as independent variables. The multiple- linear regression model which was formed with these variables was found to be statistically significant. The adjusted R-square coefficient which was obtained from the results of the analysis is 0.35.This result indicates that the effect of 6 independent variables’ on the number of members is 35%, whilst the remaining 65% is due to the effect of factors not included in the model. The statistical significance effect of total asset and net sales, which determine companies’ scale, on the number of members is consistent with the result of similar studies on this subject.